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City to Take Major Marijuana Dispensary to Court

After an NBC Bay Are hidden camera investigation revealed that a major marijuana dispensary may have broken several city ordinances, San Jose plans to shut the shop down. Chief Investigative Report Tony Kovaleski reports in a story which first aired May 10, 2015. (Published Monday, May 11, 2015)

For nine months, the city of San Jose has attempted to close down San Jose Organics, a major medical marijuana dispensary with over 5,000 members.

San Jose has already fined the dispensary thousands of dollars and told it to cease operations. The city is adding $1,500 a day to its fines for every day it remains open. Now, the two sides are set to face off in court.

In a hidden camera investigation, the NBC Bay Area Investigative Unit saw that the dispensary appeared to be violating several city regulations on the sale of medical marijuana.

"The evidence is irrefutable here in terms of what they’re doing and what they are not doing," said a retired undercover narcotics officer who joined us on our investigation. Because he still works with law enforcement, we agreed to withhold his name and disguise his identity.

In the parking lot of the dispensary, an Investigative Unit employee asked a customer how long he had been coming to San Jose Organics.

"Probably like a year," said the customer on hidden camera. "Just a year, because I've only been 19 for like a month or two."

"Obviously don’t come in and be like 'I’m 18 years old,'" advised one person identifying herself as an employee. "But they don’t give a [expletive]. For our purposes, so we don’t get in trouble, we say 21 and up because that’s the ordinance."

The Investigative Unit heard customer after customer confirm that the dispensary regularly sold medical marijuana to people as young as 18.

"Based on what I heard and observed, they are breaking the rules," said the former officer.

We showed some of this footage to Angelique Gaeta, assistant to the City Manager. It's her job to enforce city ordinances on medical marijuana.

"They don’t care about following the rules in the city of San Jose at all," said Gaeta. "They're aware of them, so there’s no ignorance on their part.”

Hidden cameras also showed that the shop sold marijuana concentrates and stayed open for business past 9 p.m., both violations of San Jose ordinances.

"Well I can’t say I’m shocked," said San Jose City Mayor Sam Liccardo when we informed him of what we found. "This is a business that’s been operating in defiance of the law for many months.”

The city has sent cease and desist orders and has levied fines against the dispensary totaling more than $100,000.

"We're not going to stop," said Liccardo. "We expect and hope that a judge will ensure that justice is served so that we can shut this business down."

We made several requests to the owners of San Jose Organics to comment on our investigation prior to our original report on Friday. Through a hired consultant, we were informed our requests were denied. But late Sunday afternoon, more than 36 hours after our first report aired, an attorney who says he represents San Jose Organics sent a lengthy email.

The attorney questioned the City of San Jose’s authority to issue binding orders on the businesses zoning--he said only a judge can validate such orders, and the two sides are currently addressing the issue before the courts. He also challenged the city’s ability to limit the sale of medical marijuana to individuals 21 and older, saying California voters and state law place no age limit. He also questioned the objectivity of our retired undercover narcotics officer .

Finally, the attorney requested that we respect San Jose Organics' right to due process and “not condemn them on TV.” They did offer to talk on camera in an interview, and we are working to schedule that now.